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KBC Bank Deutschland AG

Annual Report 2013

The bank‘s development in recent years

Balance sheet structure 2000 2001 2002 2003 2004 2005 2006

Balance sheet total 506,414 1,309,405 1,190,250 1,630,649 1,685,767 1,918,644 2,039,301

Receivables from customers 367,550 730,270 863,688 1,011,543 1,155,120 1,297,354 1,589,639

Reported equity/

U��++��+��+�� 56,305 112,881 119,680 124,337 134,039 145,196 187,982

Earnings structure 2000 2001 2002 2003 2004 2005 2006

Net interest income 9,653 14,729 18,578 25,847 29,933 31,787 34,904

Net commission income 8,186 8,292 8,462 7,267 6,929 7,328 7,646

General administration costs 13,318 14,178 14,423 13,776 14,714 15,370 17,904

Result from ordinary business activity 4,926 4,456 8,961 9,801 18,518 21,009 22,003

W�� 4,910 4,464 6,808 8,401 9,709 11,163 12,793

Cost-to-income ratio 67.1 % 56.4 % 49.2 % 39.9 % 38.1 % 37.5 % 37.8 %


2007 2008 2009 2010 2011 2012 2013 Balance sheet structure

2,434,886 2,634,069 2,381,060 2,543,446 2,587,179 2,607,737 2,187,591 Balance sheet total

1,852,675 2,219,199 2,010,861 1,954,358 2,057,291 2,138,086 1,924,421 Receivables from customers

218,482 239,008 245,220 251,705 246,542 258,925 268,736

Reported equity/

U��++��+��+��

2007 2008 2009 2010 2011 2012 2013 Earnings structure

40,757 59,474 72,370 69,076 69,506 68,546 63,709 Net interest income

8,860 8,416 8,360 8,396 9,568 8,706 7,901 Net commission income

20,244 22,995 23,051 22,878 24,114 27,827 29,077 General administration costs

25,961 30,387 26,248 20,382 5,904 3,119 18,245 Result from ordinary business activity

15,506 20,526 17,505 16,089 3,681 2,383 12,195 W��

38.5 % 32.5 % 29.1 % 30.7 % 32.0 % 35.7 % 41.7 % Cost-to-income ratio

Table of contentsSupervisory and Executive Boards 2

KBC Bank Deutschland AG 3

A Forthcoming change of ownership 3

B Sustainable and successful partner of small and medium sized companies 4

C Transparency of the bank‘s strategy 5

D Between signing and closing ... 5

E Organisational development 6

F Thanks to our employees 7

G Memberships 7

Balance sheet of 31st December 2013 8

Income statement 10

Management report 11

1 Fundamentals, business model, goals, strategy 12

2 Economic report 17

3 Supplementary report 25

4 Outlook report 26

5 Risk report 28

Notes 44

I General 44

II Accounting and valuation methods 45

III Forward transactions 58

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V Other information 60

VI Executive and supervisory boards 62

Audit opinion 64

Supervisory board‘s report 66

Your contacts 68

Special functions 70

Legal notice 70

1

We can look back at an exciting and successful 2013. During the year in which we celebrated our 150th anniversary, we were able to announce that KBC Bank Deutschland AG was to be sold to an international investor group. As a result, the selling process that began over two years ago has drawn to a successful close for all involved.

�� 6��9��9��also impressed with our long-term, stable and successful business model. That is why all the bank's business units will continue unchanged. Furthermore, there is a plan to increase the capital base so that we have the possibility to further expand, thanks to the new corporate structure.

This decision allows the bank to concentrate fully on its core competency of operating a banking business for small to medium sized corporate customers as well as wealthy private customers.

2013 was also a very successful year in terms of the earnings situation. We were �6��6�� 4�� 7�� amounting to EUR 12.2 mn which, even eliminating several positive special effects, is clearly higher than the results of the two previous years.

That is why we also saw sustainability this year thanks to the business model that has been in place for many years.

We are also delighted to be able to convince our customers, business partners and shareholders of our "new continuity" from 2014.

Axel BartschChairman

2 KBC Bank Deutschland AG

Supervisory boardDr. Wolfgang Schrörs (Chairman) Managing partner, Dr. Schrörs Vermögensverwaltungs GmbH & Co. KG, Bremen

Dr. Klaus Ridder (deputy chairman) retired

Dirk Mampaey Senior General Manager Corporate Services KBC Bank NV, Brussels

Luc Gijsens CEO Merchant Banking KBC Bank NV, Brussels

Manfred Jarczak Employee representative for bank employees KBC Bank Deutschland AG, Bremen

Konrad Markus Rempe Employee representative for bank employees KBC Bank Deutschland AG, Bremen

Executive boardAxel Bartsch (Chairman) Executive board of the bank

Michael Wolber Executive board of the bank (until 30th June 2013)

Umberto Arts Executive board of the bank (1st March 2013 - 2nd December 2013)

Guy Snoeks Executive board of the bank (from 2nd December 2013)

Supervisory and Executive BoardsB

REM

EN

3

A Forthcoming change of ownership

Three investors with long-term focus and who are independent from one another are expected to take over the bank's shares in the second half of 2014:

�� |��+�� >�� }��

�� ~��4��?��7� ��9�� Apollo Commercial Real Estate Finance

�� :��+��+��

As a result none of the investors have a majority shareholding.

The change of control is still subject to approval by the appropriate supervisory authorities. Since the future owners have already been carefully reviewed with regards to the demands of the authorities and have prepared the appropriate application, we do not anticipate any issues.

Furthermore, we shall operate as a German universal bank with the legal ��6��~/�+��7�� #U64�+��+ +�� %5��shall remain in Bremen thus keeping our long-established tradition. The quantity and location of our branches and our headcount shall remain unchanged.

�6��4��/�9+�� +��4��6��7��+�4��manager.


Bremen ��

Branches in

Hamburg

BerlinHanover

Düsseldorf

Frankfurt

Stuttgart

Munich


B Sustainable and successful partner of small and medium sized companies

We have been successfully working with small to medium sized companies for 150 years. Sustainability and stability are always at the forefront of our customer relationships. Thanks to our branches in all areas in Germany of economic importance, we offer our business partners a high degree of customer service due to the close proximity to our customers. The intensive support based on the extensive corporate expertise of our expert advisers, which is largely based on the many years of experience amongst our employees, forms the basis of our sustained and successful business model.

1863 Bank is established as a credit association

1945 Continuation as Bankverein Bremen AG

1982 Takeover of the majority of shares of Bankverein Bremen AG by Kredietbank NV, Brussels

1986 Branch in Frankfurt

1988 Branch in Düsseldorf

1989~��+��+��7�� 9+��+��4��/�W]��6��name change to Kredietbank-Bankverein AG

1990 Branch in Berlin

1995 Branch in Hamburg

1998��~��+�7�9�� 7��+��4��/��|~'��/��ABB Insurance in Belgium

1999 Branch in Munich

1999Name change to KBC Bank Deutschland AG and concentration of business strategy essentially on small to medium sized corporate business

2004 Branch in Stuttgart

2005Merger of Almanij NV and KBC Bank and Versicherungsholding NV in Belgium into KBC Group NV

2008 Branch in Hanover

2012 ��+��6��6��+��7+�7��46�+��7�

2013 150th anniversary of the bank


5

C Transparency of the bank‘s strategy

Important developments are announced during periodic management meetings and internal relationship manager’s workshops. Thanks to various control possibilities, the bank is able to adapt to the changing market conditions at any time.

D Between signing and closing ...

The bank remains integrated in the KBC Group until the deal is closed. With our many years of experience, it goes without saying that our cooperation with the KBC Group shall continue to operate smoothly.

In order to completely replace the existing services of the Group with new solutions, the bank had already initiated numerous projects several years ago that were related to the sale. Since the purchase agreement has been concluded, the project work was stepped up a gear in 2013 in order to be completely stand-alone by the middle of 2014.

Although certain additional agreements are required in the time between signing and closing the deal, the bank’s operation will continue as normal and the cooperation with existing and future shareholders shall also run smoothly.


E Organisational development

As in previous years, the bank developed itself continuously in 2013.

Many of our employees were not only carrying out their normal tasks, but were also involved in numerous organisational projects and have not only contributed to the successful completion of the partly new or changed regulatory requirements, but moreover have continuously improved the bank's procedures.

In addition to the permanent improvement of customer-focused services and the continuous training of staff, there were major organisational projects, e.g.

�� 7��:��6�� >�U~�

�� '4�'��7��:�� =~��~�

�� +��6�+�� +�6+�+�� +�� +��allocation of liquidity costs or

�� +�� 7��:�� 9� ��+�7� �� international scale (Basel III), e.g. through the implementation of the Capital Requirements Regulation (CRR).

Additionally, the preparations for the closing of the sales process played an essential role in 2013.

In some areas the organisation structure was also adjusted - in line with the guidelines of the minimum requirements for risk management (Ma Risk).

KBC Bank Deutschland AGH

AM

BU

RG

7

F Thanks to our employees

The bank's success is predominately due to the high level of commitment and service given by our employees. This was particularly noticeable in the run up to signing the agreement in September 2013, considering the continuous uncertainty regarding the new owner's structure.

The large number of extraordinary projects was only handled by the very �6��+�� +:�� 5�=��+��}�6�+:��6��:+��board would like to extend their sincerest gratitude to all employees.

G Memberships

We are a member of the Bundesverband deutscher Banken e.V. (Federal Association of German banks), and therefore also of their deposit guarantee fund (Einlagensicherungsfond). Similarly, we are a member of the Entschädigungseinrichtung deutscher Banken GmbH (Compensation Scheme of German banks).


Balance sheet of 31st December 2013 for KBC Bank Deutschland AG, BremenAssets

EUR EUR EUR

1. Cash reserve a) Cash balance b) Credit at central banks, including: at the German Central Bank EUR 12,492,019.21 (prev. year kEUR 179,774)� � %��+��4��/� EUR 0.00 (prev. year kEUR 0)

316,231.1412,492,019.21

0.00 12,808,250.35

171179,774

0

2. Public sector debt and bills of exchange that are eligible � � �� a) Treasury notes and non-interest bearing treasury bills as well as similar debt instruments issued by public institutions b) Bills of exchange

0.000.00 0.00

59,9920

3. Receivables from credit institutions a) due daily b) other receivables

11,642,944.2530,147,940.65 41,790,884.90

6,71872,876

4. Receivables from customers thereunder: secured by mortgages insured EUR 280,774,070.00 (prev. year kEUR 266,549) Public sector loans EUR 0.00 (prev. year kEUR 0.00)

1,924,420,799.75 2,138,085

� �� a) Money market securities aa) from public sector issuers thereunder: eligible as collateral at German Central Bank EUR 0.00 (prev. year kEUR 0) ab) from other issuers thereunder: eligible as collateral at German Central Bank EUR 0.00 (prev. year kEUR 0) b) ��}��'+�� 6�+�+�� ba) by public sector issuers thereunder: eligible as collateral at German Central Bank EUR 197,665,026.36 (prev. year kEUR 133,022) bb) by other public sector issuers thereunder: eligible as collateral at German Central Bank EUR 0.00 (prev. year kEUR 0) c) own }��'+�� 6�+�+�� Nominal value EUR 0.00 (prev. year kEUR 0)

0.00

0.00

197,665,026.36

0.00

0.00

197,665,026.36

0.00 197,665,026.36

0

0

133,022

0

0

6. Investments thereunder: other credit institutions EUR 304,954.52 (prev. year kEUR 305)� � ��6��+��:+��+��+�6�+�� EUR 0.00 (prev. year kEUR 0)

323,714.52 324

7. Shares in associated companies thereunder: other credit institutions EUR 0.00 (prev. year kEUR 0)� � ��6��+��:+��+��+�6�+�� EUR 0.00 (prev. year kEUR 0)

51,129.19 51

8. Intangible assets a) Self-created industrial property rights and similar rights and values b) Acquired concessions, industrial property rights and similar rights and values, as well as licences to such rights and values c) Goodwill d) Advance payments

0.00

512,989.710.000.00 512,989.71

0

28600

9. Tangible assets 2,386,987.86 2,555

10. Other assets 7,369,721.62 13,529

11. Accruals and deferrals 261,351.74 354

Total assets 2,187,590,856.00 2,607,737

Balance sheet

prev. year kEUR (31st Dec. 2012)

9

Liabilities

EUR EUR EUR

�� a) due daily b) with agreed term or period of notice

12,221,200.58759,866,315.78 772,087,516.36

11,8961,399,034

2. Liabilities to customers a) savings deposits aa) with agreed notice period of three months ab) with agreed notice period of more than three months b) other liabilities ba) due daily bb) with agreed term or notice period

993,404.75

10,608.91

290,241,841.40829,273,881.91

1,004,013.66

1,119,515,723.31 1,120,519,736.97

1,142

9

277,736634,277

3. Other liabilities 5,719,934.83 7,459

4. Accruals and deferrals 74,396.42 222

5. Provisions a) Provisions for pensions and similar liabilities b) Tax provisions c) Other provisions

8,636,392.4919,592.52

11,796,800.08 20,452,785.09

8,515449

8,073

� �� thereunder: due within two years EUR 0,00 (prev. year kEUR 0)

50,000,000.00 50,000

7. Equity a) Subscribed capital b) Capital reserve c) Retained earnings ca) Legal reserves cb) Reserve for shares to a controlling company or company with majority holding. cc) Revenue reserves cd) other retained earnings d) Net earnings

102,258.38

0.000.00

101,809,559.92

14,502,794.2190,126,115.89

101,911,818.3012,195,757.93 218,736,486.33

14,50390,126

102

00

101,8102,384

Total liabilities 2,187,590,856.00 2,607,737

1. Contingent liabilities a) Contingent liabilities from discounted bills of exchange b) Liabilities from guarantees and guarantee agreements c) Liability for the collateralisation of third party debts

0.00

431,224,084.88

0.00 431,224,084.88

0

502,450

0

2. Other obligations a) Repurchase obligations from non-genuine repurchase agreements b) Placing and underwriting obligations c) Irrevocable credit commitments

0.000.00

320,596,394.00 320,596,394.00

00

396,975



Income statement for KBC Bank Deutschland AG Bremen for the period of 1st January to 31st December 2013

EUR EUR EUR

1. Interest income from a) credit and money market transactions b) }��+��6�+�+��4��7+��+ �

100,417,974.267,762,283.47 108,180,257.73

133,7245,618

2. Interest expenses 44,471,499.69 63,708,758.04 70,796

3. Current income from a) ��'}��+��6�+�+�� b) investments c) shares in associated companies

0.0017,400.00

0.00 17,400.00

018

261

� �� !��"��"��#��"�� partial transfer agreements 10,552.80 0

5. Commission income 14,550,418.27 19,163

6. Commission expenses 6,649,313.99 7,901,104.28 10,457

7. Other operating income 2,610,047.67 2,308

8. General administration costs a) Personnel expenditure aa) Wages and salaries ab) Social contributions and expenses relating to pension �� 4��6��+�� schemes EUR 345,741.89 (prev. year kEUR 711) b) other administration costs

14,658,956.72

2,322,132.23 16,981,088.9512,095,631.41 29,076,720.36

13,727

2,656

11,445

9. Depreciation and value adjustments for tangible and intangible assets 766,534.10 738

10. Other operating expenses 1,739,044.09 973

11. Depreciation and value adjustments on receivables and certain securities as well as additions to provisions for credit losses 31,684,942.54 45,276

��$�� %��&��'��"��&��"��#� shares in associated companies and also securities � � �� 0 1,896

��(�� !��"��"��"� ��)��&��"��#� shares in associated companies and also securities � � �� 7,264,744.31 0

14. Expenses from loss transfer 0.00 9

15. Result from ordinary business 18,245,366.01 3,119

16. Extraordinary expenses 142,999.00 143

17. Tax from income and from earnings 5,877,753.37 555

18. Other taxes not shown in position 10 29,996.79 5,907,750.16 38

�*�� +�� 12,194,616.85 2,383

20. Accumulated income from previous year 1,141.08 1

21. Net earnings 12,195,757.93 2,384

Income statement


11

Table of contents1 ,��"��#��"��#��#��- 12 1.1 Preamble 12 1.2 Integration of the business 12 1.3 Business model 13 1.3.1 Target groups 13 1.3.2 Products and services 14

2 Economic report 17 �5�� ?�� +��+��6��'��+� general conditions 17 2.1.1 Macroeconomic situation 17 2.1.2 Ifo business climate in Germany 18 2.1.3 Automotive sector 18 2.1.4 Machinery sector 19 2.1.5 Financial markets 19 2.1.6 Banking sector in general 20 2.1.7 Small to medium sized business of the German banks ("Mittelstand") 21 2.2 Business performance 21 �5*� U��>+�6��+�� 22 2.3.1 Commercial law perspective (according to HGB - German Commercial Code) 22 2.3.2 Management reporting by division 23 2.4 Finances 24 2.5 Assets 25

3 Supplementary report 25

4 Outlook report 26

5 Risk report 28 5.1 Principles of the risk strategy 28 5.2 Risk management 28 5.2.1 Organisation of risk management 29 5.2.2 Communication 31 5.2.3 Risk categories 31 5.3 Summary 43

Management report


1 ,��"��#��"��#��#��-

1.1 Preamble

��+��:��6��6�+�7��+��$�*�9+��+7�+�7�of the purchase contract, according to which one group of three independent from one another long-term investors will take over of KBC Bank Deutschland AG from KBC Bank NV Belgium. The transfer of ownership (the Closing) is expected to take place in the middle of 2014 as the competition and regulatory bodies are yet to agree.

Bearing this in mind, we have fundamentally revised our management report to improve clarity and transparency. In so doing, the bank is adopting the new

"German Accounting Standard No. 20 for the (group) management report”. The bank intends to continue with the new structure in future.

1.2 Integration of the business

KBC Bank Deutschland AG shall remain a 100% subsidiary of KBC Bank NV until the deal is closed. The existing control agreement that has been in place since 1989 shall remain in force until the sales agreement has been closed and shall then be invalid.

=��9+�7��+�:��7��6��

�� |��+�� >�� }��

�� ~��4��?��7� ��9�� Apollo Commercial Real Estate Finance and

�� :��+��+��

shall take over the shares of the bank. None of the new owners will have a majority share.

Management reportB

ERLI

N

13

1.3 Business model

1.3.1 Target groups

We at KBC Bank Deutschland AG consider ourselves to be primarily specialists for the comprehensive support of small to medium sized corporate customers (“Mittelstand”) in Germany. We offer this service at �6�� +�� 6�� 4�� +�� +�� 46�7�� :��Düsseldorf, Frankfurt, Munich and Stuttgart. Our business approach is therefore "relationship oriented". We strive for balanced and long-term customer relationships with a clear commitment to commercial banking. As a result we choose customers who can help us strive for a considerable market share in the target group or area and who will pay appropriately for the products and services offered.

With regards to our corporate customer division, our target customers have a turnover > EUR 30 mn annually and as they operate on an international ��:��+�� 7� ��7+:��6��6�+��6��our earnings expectations. Furthermore, we offer special product segments such as /�� and real estate business.

At our Düsseldorf branch we operate network desk activities, i.e. services, which the international customers of the KBC Group use from the KBC-home markets, and these will be discontinued when we leave the KBC Group once the deal is closed. The employees and customers who work with the network desk activities shall be transferred in due course to the German branch of the KBC Bank NV that is due to be set up.

As another target group, we understand wealthy private customers with liquid assets who are able or expected to invest over 200 kEUR, as well as institutional and other interested parties/buyers of asset management products of the KBC Group.

~��6��9��9��:��4��9+��6��7'�� 4��successful business model, we will continue unchanged with these business areas of the bank in the future. There is however one exception - the business with the network desk customers. This customer group that is closely associated with the KBC Group will be transferred to the KBC Bank NV as part of a carve-out once the deal is closed.


1.3.2 Products and services

1.3.2.1 Corporate customers

With regards to corporate banking, all forms of the traditional credit business form the basis for the business relationship.

The division of /��has been operated from our Frankfurt branch since the start of 2002. Following the successful market entry regarding initial participation in syndicated acquisition loans, we have established ourselves in the German LBO market within a short period of time. Today we are involved as arranger of acquisitions in the midrange segment.

In the real estate�46�+��+:+�+��6�� +��+��+�7�for professional customers in the core areas of project development and property investments.

The bank has an excellent network of bank partners in the syndicated loan business at its disposal, thanks to our syndication desk Germany. We provide our customers with this network, the associated placement power as well as extensive market expertise in structuring consolidated loans and borrower's note loans. Following the forthcoming detachment from the KBC Group, the syndication desk Germany, with its long-term and experienced employees, will offer this service to our small to medium-sized German customers as before.

An experienced trading team operates the corporate sales business out of �6�� =��/�6�� 4��5� ~�� +�+�� 4�� 9+�� 4�� +��small and mid-caps through research publications and products focused on customers' needs for hedging ��)��-��. In addition to the 10-hour trading window from 7.45 to 17.45, participation (as market maker) in the multi-bank platform 360 Treasury is also part of the service we provide.

We offer a wide range of systems for the transmission of both domestic and international payments. In addition to MultiCash, W1SE (an internet solution ��+��+��6�� +��6��W]%��online banking, our bank has many cash pooling products at its disposal that ��6�� +��+�� +�+��+:��/�� +:��5�

Management report

15

Preparations to join SEPA, the single European payment system, were ��+�� +�� $�*5� �6�� 6�� +:�� 6�� >�U~� �� their implementation of SEPA; this team is made up of employees from the payment department, the organisation and IT.

In the central international business division we have experienced specialists at our disposal for our customers in the documentary business and export ��7��6��5��}��+�7�7��6��4��6��7��with additional staff.

In documentary business, the product range on offer consists of�� \ ��}��+�� ;�6 ��+�� +�7��+��+��76��

as well as in �� =��+�+�7��+:�4�� 6��+�� /'��'4��/�� U��'�}��+��+�7

�� +6 ��7'�� }��+�7�+��76��:��4��+��European Export Credit Agencies (ECA) against default risks. In addition to Euler Hermes Deutschland AG, our team of experts work with OeKB (Austria), SERV (Switzerland) or FINNVERA (Finland). As a shareholder of AKA Ausfuhrkreditgesellschaft mbH, Frankfurt (AKA), we can furthermore use and offer the entire product range of AKA.

1.3.2.2 Private customers/asset management

The focus of the private banking business remains as always on the acquisition of asset management mandates. The agreements that were most commonly concluded in 2013 were AM agreements with an equity share of up to 50%. The portfolios “Income” and “Growth” extend our offer of traditional AM deposits and are managed with an equity share of between 30% and 80%. The minimum amount is 200 kEUR.

Another category of our asset management is the funds portfolio management with a minimum investment amount of 100 kEUR. The levels of risk are identical to those of classical AM. The investment is mainly in non-KBC-group investment funds.


We offer an asset management service, exclusively with the American shares called "Best Picks", in cooperation with the American brokerage house, Raymond James. This starts with a volume of 250,000 USD and is exclusively offered in Germany.

In the individually managed portfolio of securities our customers preferred +�:�� 4��+��6��4��46��+��6��+��on German and European standard shares. As before, non-KBC-group investment funds form a strong framework in our customers' portfolios of securities. Balanced funds with various values were also a well-chosen asset class in 2013.

KBC Asset Management (KBC AM), with the team "institutional fund business/asset management" of KBC Bank Deutschland AG, is represented in Frankfurt and Bremen for Germany, Austria and Switzerland. Continuity in ��6��+��6�� +��+�:�� of our product range are at the forefront of our activities and represent the most important elements for a successful position in the market. KBC AM, with its total assets of EUR 85.2 bn, is considered to be the leading provider of investment solutions in the Belgian home market. The specialisation �� 7+�7� ��/�� 6��+�� +�7� �� +��+�� +�/��particularly stand out across Europe. In 1989 KBC AM already applied an international bond strategy with active risk management for both mature and developing markets and as a result had one of the most successful international bond funds. In 1997 the emerging markets bond fund (US Dollar) ��+��7��+��6��5��+��6��6�� +��+��'�+�/��4��+��~?�9��+�� +��+��5��}��}��+�� +�� 7� �� +�� +�� 76��9��given by independent agencies such as S&P and Morningstar.

Since 1992 investments with sustainability criteria also play an important role at KBC AM. The product portfolio ranges from sustainable equity funds ��6��9��+:��7��+ ��7��7��+��to bond funds that are denominated in local currencies. KBC AM can also show particular expertise in the management of funds with special share topics: These are value/dividend strategies that KBC AM implemented back in 1998 and unique on the market. The idea is to invest in companies that implement repurchase programmes and/or show a high dividend continuity. This cooperation shall continue after closing the contract.

Management report

17

2 Economic report

2.1 ;��"��-)��

2.1.1 Macroeconomic situation

Consumers ultimately saved the German economy from a decline in 2013. This is why in the midst of the recession, Gross Domestic Product (GDP) in parts of Europe increased by 0.4% in the previous year. This was announced 4��=��>��+��+��+��+��6��$�"5��9��$5��was once again below the weak level of 2012. As the President of the Federal �� |��+�� 7�� +�� +�� 9�:�� +��Europe".

=�� + ��+�� +�� +��$$�� +�+��7�export industry, which drives the economy for Europe's largest economy, plummeted. Since imports (up 1.3%) increased faster than exports (up 0.6%),there was a negative contribution to the total account - in spite of an export surplus of 7.3%. The slowdown was revised by the Federal statisticians to minus 0.3 percent. "The German economy was obviously hit by the ongoing recession in several European countries and this resulted in restrained economic growth", said Mr. Egeler.

Investments also did not provide any positive impetus. Domestic consumption, which reported a growth of 0.7%, was the only driver of GDP growth. With 57.5% consumers alone contributed to the lion's share of the German economic performance.

Mr. Egeler described the development of the labour market as "quite amazing" '�+��+�+�� +��+��4�4��5��#�$��%5��+��unemployment in the Eurozone has reached shocking levels, more people than ever before are in employment in Germany. In 2013 the number of people employed reached 41.8 million, a new record for the seventh year in a row. Since its peak of 10.5% in 2005, the unemployment rate has more than ��:��+��9��:��+��6�+��+��5

As measured by the weakness of the European economy as a whole, the economy was still stable and the record employment in 2013 helped Germany ��7�+�� 9+��+��+ +�� }+ 6 ��percent of GDP. Due to the surpluses in the social security system and by the �� 6�++��+�+��9��+�+�7��+��9+��7��=��government and states, there was a small shortfall of EUR 1.7 bn.


In terms of GDP, that relates to a minus of 0.1%. In 2012 the German government even generated a small plus of 0.1%.

For the current year, economists are unanimously expecting a clear improvement in the economy. Forecasts range between 1.5% and 2%. The World Bank is also expecting an upturn in the global economy.

2.1.2 Ifo business climate in Germany

~��+��46�+��+ ��+��}��:��+ ��+��9�+��half of 2013, it showed month by month improvements in the second half of 2013.

The business climate for manufacturing has shown signs of further improvement. At the end of the year the optimistic expectations of the industrial companies increased to their highest level since early 2011.

�� 46�+�� + �� +��}� +�� 9�� 9�:�� +��5� �� have clearly not assessed their current situation well. The index has also somewhat declined in retail too.

Construction has seen a further increase in the business climate index. A better assessment was made of the current business situation at the end of ��5�=6�� 6�+�� +��/+�7��a further improvement in business.

At the end of the year, the indicator for the service industry increased to its highest level since the summer of 2011.

As our core business is based on the small to medium-sized corporate “Mittelstand” segment, we are looking at the following hereafter at important branches for both Germany and our business model.

2.1.3 Automotive sector

The European automotive market has stabilised following years of shrinking. ;��+��6��$�*�9��9��+�� 9��6��the crisis in Southern Europe.

Management report

19

In 2013 the Germans purchased fewer new cars than in the previous year. The number of new cars fell for a second time to below the three million mark.

With regards to the German domestic market, there was only one winner amongst the German car manufacturers: Porsche with an increase of 1.4%. Volkswagen, despite a 4.6% decline, continued to be the market leader. BMW was down 5.8%, whilst Audi, Mercedes and Opel were down 5.5%, 1.4% and 2.9% respectively.

In the month of December the domestic market performed comparatively well. The German Association of the Automotive Industry in Western Europe and Germany expects a slow recovery of the market in 2014.

2.1.4 Machinery sector

��+�7�� +�� 6�� 6�+�7� �� $�*� +�� +��engineering sector. Out of concern for the economic development in the Eurozone, entrepreneurs investing in new machinery held back.

The widespread uncertainty regarding the economic development in Europe ��9��9�� 7+��+�7�+��6��5��+:��+7�+��dropped below the level of the previous year, domestic business was particularly disappointing with a dramatic decrease in orders.

German machinery engineers were however able to see light at the end of the �6��9��5��:��67��4��/��9��+�7�up, the industry association dampened the euphoria.

2.1.5 Financial markets

Investors should not underestimate the potential of equities. Many investment strategists gave investors this advice for 2013. They were correct: the stock markets, particularly in the industrial countries, outgrew all other investments last year. The biggest surprise was that the upswing on the stock markets proceeded relatively calmly.

In fact in spring there were also setbacks on the stock markets in developed �6��+��9�� >�=��|��:�� +��+�� +��9+�� /�� +��+��9+�� +�6+�+��6�+�7� ��6��7�:�� 4��


Management report

and mortgage bonds. Most stock exchanges however recovered from the shock and reached record highs at the end of the year.

This, however, did not apply to shares, bonds and currencies of most emerging markets. They still have not recovered from the Fed shock. The major slump in the emerging markets is among the negative surprises that 2013 had to offer.

The Dow Jones increased in 2013 by approx. 21%, and the Nikkei rose by 23% and the Dax increased by 26%.

Moderate increases are also forecast for 2014. A good breeding ground for the continued upswing in the stock market includes global economic growth, steady corporate earnings and, as always, a relaxed monetary policy.

2.1.6 Banking sector in general

�$�*�9��+�6��4��/��:��+�6��5��76��9��clamping down on banking activities world-wide. As a result, the number of credit institutions in Germany shrank from 2,912 in 2000 to 2,056 in 2013.

At the same time the central banks' low interest rate policy pulverised the ��7+��+��+��+�6�+��5�~��6��+�+��4��/��were forced to inundate the global markets with liquidity in order to prevent depression such as that experienced in the 30s.

The German Federal Bank in its Financial Stability Review of 2013 states:“In the continuous low interest rate environment the margins of the German banks come under additional pressure and this further reduces the structurally weak basic earning power. That hinders the build-up of equity from retained earnings as it can weaken the risk-bearing capacity, depending on the institute, ��6��+ ��+��4+�+��5�

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21

2.1.7� <"��"��")��=��>��"��?@;��QX

In an interview in December 2013, Andreas Schmitz, spokesman for the executive board at HSBC Trinkaus and former president of the Bundesverband deutscher Banken (German Association of German banks), explained:

"In Germany there are more banks than breweries. From its loan business, one earns too little to live but too much to die. Additional business, such as foreign currencies, derivatives, access to the capital market, managing ��+��+��}��+��5�

In the traditional credit business the margins shrunk in corporate banking in the mid-cap market. More and more domestic and foreign banks discovered that German companies were a lucrative target group.

=6�� >?�� 4�� +:�� 4��/� ��+�7� �� temporary phenomenon. However, in this segment there were also very �+�6��}��+��+�:��:��5

2.2 Business performance

Despite the ongoing purchase process, the bank can look back at a successful 2013. At EUR 12.2 mn the result after tax was clearly higher than both previous years, even taking into account the positive special effects in 2013. The bank was not, however, able to meet its planned result; this was once again due to several special effects with regards to risk provisions (for further explanation ��+�6��+��%5

�� +�+�� +��+�� 7�+�� +�� +6 � �+��businesses" are very attractive and are valued highly by banks in the German market. This also put pressure on the margins in 2013. Furthermore, the drop in demand for credit in 2013 was less than was originally expected.

Once the plan to sell was announced, the bank had already initiated numerous projects several years ago that were related to the sale and with a view to 4�� +�7�� +��5�U��9��/� +��+�� +��$�*��6�� the successful signing of the purchase agreement and to be able to reach a stand-alone ability from the middle of 2014 on. Based on the good experiences of previous years, the bank called upon the support of experienced external consultants at times.


2.3 ��

2.3.1� Z�""�� &��?��[>��)�>��"��Z�""��Z��X

In 2013 the bank achieved a �� of 12,195 kEUR, which was clearly above that of previous years, having taken into consideration the special effects of the risk provisions.

��+7�+�� +�� +�� +�� }��+�� +�� +��below.

In comparison to the previous year, the interest income fell by EUR 31.2 mn and interest expenses by EUR 26.3 mn. As a result the net interest income dropped by EUR 4.8 mn. This relates mainly to the decline in activity and is consistent with the shortened balance sheet. Interest earnings from }��'+��6�+�+��:��6��7��+��+��6�+�+��portfolio – as a whole the interest rate level fell again in 2013.

The decrease in commission income and commission expenses was less pronounced in 2013; this is mostly due to lower incomes and expenses from currency options. Net commission income as a whole however only decreased by EUR 0.8 mn, one reason being lower commissions on guarantees.

By contrast, other operating income increased by EUR 0.3 mn and this mainly due to the reversal of provisions.

Administrative costs were EUR 1.2 mn higher than the previous year. This includes, above all, higher personnel costs that are, amongst other things, due to a general increase of the salary. Furthermore, several positions at the 4��/�9��6��+�7�+��+��+��9�7��6�� +7��6��+��5

The other operating expenses increased by EUR 0.8 mn in comparison to the previous year. The increase was due to the formation of a provision for possible risks in the private customer business.

At 31,685 kEUR the risk provisioning affecting the income statement was clearly lower than the value of the previous year. The included depreciation and gains from securities in the liquidity reserve amounted to -3,825 kEUR, so that -27,860 kEUR was attributable to the traditional credit business. This value exceeded our expectations, however it again

Management report

23

included a few special effects: an individual impairment of 9,000 kEUR had to be made in the speciality chemical sector; furthermore the bank completely streamlined the portfolio of renewable energies in 2013; as a result the risk provisioning increased by 5,210 kEUR. A further 860 kEUR relate to the allocations for general loan loss provisions.

In the course of streamlining the investment portfolio of bonds from the PIIGS countries, �� "�� of EUR 7.3 ��9��4��4��+��6�� +��+��}��capital. The remaining securities of the bank as of 31st December 2013 (incl. liquidity reserve) were divided between Belgium, the Netherlands, Germany (incl. federal states) and Austria.

2.3.2 Management reporting by division

The total gross income in 2013 was approx. EUR 6.9 mn lower than that of the previous year. With the exception of the "Real Estate" division, in which the credit volume remained almost unchanged or slightly increased due to new 46�+��9��9��:+�6��7��5�This development is essentially due to a shortened balance sheet.

The proportion of the corporate target customers (EUR 45.1 mn) from total income from corporate banking remains almost unchanged at 66%, ��6+�+�+�� +�7� ��+46�� |� ��5�� 9�+�� +�� }5� �� corporate banking income.

The income from private banking/asset management amounted to EUR 3.2 mn and was somewhat similar to that of the previous year, but below target. The business of alternative investments came to a complete standstill and, furthermore, hardly any margins were achieved in deposit banking either - due to the lower rate of interest.

In 2013 the "Treasury" was again hit, as in previous years, with liquidity costs; �� $�"��9+��4��+�7��9��+�6+�+��++�7��6��4��6��+��5�~��+�7��6�6��bank also led to longer terms in 2013, the costs were higher as a result and hit the Treasury harder than in the previous year. Furthermore, in 2013 the bond portfolio was restructured and this had a massive impact on yields, so that ��6��6+��9��+7�+��9��+��9+��7'�� investment strategy that was suspended in the meantime.


The administrative costs with regards to management reporting were also slightly above target and those of the previous year. This is mainly due to the increase in other administrative expenses that resulted from, amongst other things, higher compulsory contributions and expenses for legal advice.

��'��'+�� +��9�+��+��+�� +�� was 42% and was therefore higher than in the previous year (36%). This is not very surprising but is simply a consequence of lower earnings at slightly higher costs.

2.4 Finances

The bank's capital position did not alter in its composition in 2013. Our bank has a subscribed capital of 14,503 kEUR that is divided into 567,300 individual shares. The shares are issued in bearer form. On 4th March 2009 the AGM authorised the executive board to increase the subscribed capital by up to 7,250 kEUR by 30th April 2014 at the latest, with approval from the supervisory board. No use has been made of this authorisation to date. The capital reserves amount to 90,126 kEUR and the portfolio of retained earnings is still 101,912 kEUR.

The �� of 50,000 kEUR was guaranteed by an agreement that was concluded with KBC Bank NV on 19th March 2001. Other ��++��+�� +7�� 6�� 6+�� +�� +�4�� 6+��capital according to KWG (German Banking Act). At the start of 2013 the term for participation rights was extended by two years to 31st May 2018; the interest remains unchanged at 6%.

The new owners have already indicated that the capital base will be clearly increased once the deal has been closed. At the time of putting the management report together the exact amount as well as the allocation had ��+��4��+��5

The bank continuously invests in operating and business equipment and intangible assets to guarantee the banking operation and the ongoing ��+�6�6��:�� 5�\��+��$�*��+6��+ ��investments were made.

Management report

25

2.5 Assets

In the reporting year the balance sheet total fell by approx. EUR 420 mn to EUR 2188 mn. In addition to the approx. EUR 167 mn lower credit balance with central banks�� 9�� +7�+�� +�� +�� receivables from customers, which fell by EUR 214 mn as a result of a very selective new business. This development relates to the planned reduction in the target balance sheet total at closing as part of the sales process.

The receivables from credit institutions were almost halved compared to 31st December 2012 and now amount to EUR 41.8 mn. The credit business with banks still plays a minor role.

The securities portfolio, taking into consideration the debt instruments issued by public authorities in 2012, has scarcely changed; there was however ��6�6�+�7��}��+�6+�+��:��5��+��development was that the bank completely reduced its PIIGS portfolio in 2013.

In comparison with the previous year, the provisions increased by EUR 3.4 mn to EUR 20.5 mn. The creation of a new provision for credit business was the main factor as a component of other provisions totalling EUR 2.2 mn.

The contingent liabilities fell by EUR 71 mn; as with receivables from customers, this relates to the selective new business.

3 Supplementary report

There were no transactions after the reporting date that have had a material + ��+��+�7��+�6��+�� +��+��7��+��+�� 5


4 Outlook report

��$�"�+��7�+��+��4��+��+��6��5�\��9��uncertainty in previous years regarding the future ownership structure, then this year it is particularly the uncertainty regarding the date of the change of ownership that is planned for the middle of 2014.

The purchase agreement proposes that our network desk division will be sold to KBC Bank NV several weeks before closing the deal. At this moment in time there are no more earnings from the network desk available. At the same time the direct labour costs for those employees transferring to KBC Bank NV are reduced.

=6�� 9� �9�� :�� +7�+�� +�� capital base so that the new corporate structure allows us the opportunity to increase growth.

Our business planning is based on the assumption that the network desk will generate income at the same level of the previous year until April 2014. If more smaller partial portfolio-sales are necessary to achieve the target balance sheet structure for the closing, we will plan for conservatively lower earnings from May 2014. Taking into consideration the missing income described above after closing the deal, we estimate total income of EUR 53.9 mn from corporate banking for 2014 and this falls below that of the previous year, despite slight growth having been predicted in the target customers and ��46�+��5�~��+��+��6�� +�7��+�6+�+��costs that is to be implemented is to be taken into consideration from 2014: according to the minimum requirements of risk management, all banks must implement a liquidity transfer price system by the end of 2013. This system ��6��+�6+�+��+��+46��5��+��the implementation of this system on 1st January 2014, all market sectors, in particular corporate customer business, will be hit with higher liquidity costs whilst the treasury��+:��+�7�� 5�\��+�+��6��+��6��+��+�� 6+��++��+��capital that was lower in 2013. The decline, in addition to being underpinned by the general decline in the interest rate, is attributable to the capital that was invested in long-term European government bonds, in agreement with the KBC Group in October 2013, being sold allowing the bank to only realise a low yield in capital assets.

In private banking/asset management we estimate income of EUR 3 mn for 2014 and this is at the same level as 2013.

Management report

27

With regards to corporate banking, the income received from corporate sales in 2014 has dropped to EUR 2.5 mn and this is due to the transfer of the network desk to KBC Bank NV amongst other things.

In order to become independent in the new ownership there are some systems and services of KBC Group that are to be taken over by own solutions or alternative providers. KBC Bank NV is indeed bound by contract to provide certain services for a transition period of up to 3 years and beyond; this however is at the appropriate service charges which is why the bank aims to keep the transition period as short as possible. Nevertheless in 2014, in particular, there will be charges for substantial one-off costs for the implementation of the interim solutions as well as additional costs for the parallel operation. The recently completed ratings methods, provided by external providers, also represent a large cost position in this context. As a whole, the planned administration costs for 2014 will be in the region of ��|�*$5�� 5��++��+7�+�� we have estimated that our costs for 2015 will be approx. EUR 28.5 mn.

\�� +�+�� +�� +��6�� 4�� +��+��6��6��7�:�� 4��+��9��9�estimate a booked risk provision of EUR 15 mn that will impact the income statement.

As a result after tax� #4��++��+�� +��+:+��%�9��are expecting EUR 11.2 mn and this is approx. EUR 1 mn lower than the 2013 ��6��76��5

=��+ ��+��$�*��4��/��+��+�/'4��+�7��4+�+��+��context of a capital planning process��}��+��'��a result the bank is and remains stable. This is mainly underpinned by the sound capital base.

The business and capital planning were agreed, as always, with the supervisory board and moreover also with the new owners.


5 Risk report

5.1 Principles of the risk strategy

Our corporate strategy, which consists of a strong focus on corporate banking business, cannot aim to rule out risk. On the contrary, the deliberate and controlled management of risk is becoming more and more important for the company to succeed. This requires that we recognise the risks at an early stage and that we are able to quantify them in order to develop the correct risk strategy:

�� |+�/��:�+�� 4��+�� |+�/��6�+�� +��6��6��' ��6�� |+�/��+ +��+�� +��:+��+��6�� |+�/�� /��+�/

Taking this into consideration, two important guidelines for managing risks in our bank can be formulated before the individual risk categories are substantiated and detailed:

1. With regards every trade, the opportunities and threats must be proportionate and the cost of the risk must be correct.

2. We wish to use risk as an additional management tool and use available instruments for it.

5.2 Risk management

��7'�� 6�� +��+��+�/�management. Competitive advantages can be realised by managing risk in a controlled and deliberate manner. One important requirement for this is the company's ability to understand the company's own risk as an additional performance indicator and to put it into practice.

KBC Bank Deutschland AG has outlined the strategic and operational aspects of the bank's risk management and made it an integral part of the business behaviour. At the core of the development and implementation of our risk management system is the aim of creating scope for action that facilitates ��7'�� 6�+��}+��+�7��+��9��+��6��9�+�� +�� 6�� 6�� 4��/�� +�6��}+��5��+�� +��+�:��4��7�+�+�7��+�/�� }+��7�5

Management report

29

The risk management system implemented by the bank is an integral part of the overall planning, management and reporting processes in all relevant 6�+��+:+�+��+��+ �� +�+��+��+�� management and documentation of risks. Whilst taking certain risk categories +��+��+��+�/��+:+�+��+��6�+��+��+��and assessed in accordance with their probability of occurrence and level of loss. The assessment of level of loss is carried out whilst considering the effects of risk on operational units. In addition to the strategic orientation of the risk management, the bank has set up a monitoring system that ensures and guarantees the bank's continued existence and which will detect any threatening developments and confront them. The risk management system ��9�� }�6�+:��4�� +7�+�� +�/��7��to implement countermeasures. In so doing, the risk management system subjects the bank to continuous improvement. In 2013 many projects were launched to adjust the existing controlling tools to the new supervisory and strategic guidelines. The bank also uses external experts for support.

Every autumn the executive board and senior managers from various divisions of the bank continue to develop the business strategy as well as the risk strategy that is based on it. Based on the assessment of the current �+�6��+��+�/��+��+��+��+�/�+�:��6��+��assess the bank's current risk situation in light of external factors and market developments and to take action if necessary in order to prevent substantial loss.

5.2.1 Organisation of risk management

��+�/� ��7� ��+�+��+�/��7��+��of the internal jurisdiction in the executive board's responsibility. These tasks are partly delegated within the bank to credit risk management and risk controlling. Furthermore, the internal audit serves as an independent supervisory authority.

The bank has had a risk management system in place for years, which ensures the early detection and assessment of risks and applies the necessary control measures; this involves all market and specialist areas. It is regularly reviewed whether the legal requirements, in particular the Minimum |��6+�� |+�/�?��7� ��#?�|+�/%��6��5


The internal audit unit is included in the risk management and controlling processes as an independent supervisory point, so that, if necessary, the necessary measures or actions can be implemented at an early stage. Its main task is the supervision of the adequacy and effectiveness of risk management measures. Furthermore, based on its position in the company, internal audit serves to provide impartial information and advice to the management team, the supervisory board and the group auditing unit and serves as the main contact for the annual auditor.

The bank has appointed various committees to identify risks, to make assessments and decisions regarding risks. The main committees with regards to risk management are:

The Kredit Committee Bremen (KCB), which is made up of the full executive board, decides, depending on the size structure of our credit portfolio, over the predominant portion of the credits. In an advisory capacity, the manager ��+��:+�� ~��:��#4�/��%�� 7��+��involved in the decision-making.

A member of the executive board, as well as managers from various divisions of the bank are members of the Local Operational Risk Committee (LORC). The LORC initiates risk inventories whose results are promptly consolidated in ��+�/�+�:��5�\��+��+4��+�/��+5�5��+��+��+��6��+��+��+��+�/��/��4��4��/�� /��677��+��for individual control measures and oversees their implementation. The risk inventory is the basis for the effective management of risk by the executive board and is a control function for the supervisory board.

The Asset and Liability Committee (ALCO) deals with the interest and currency risk as well as the bank's liquidity situation at least once a month. In addition to the executive board, the Treasury, the head of strategic methods and processes of bank management, the head of risk controlling, as well as (risk) controlling staff, are members of this committee.

Management report

31

5.2.2 Communication

Thanks to transparency, reliability and the highest level of openness that allows dialogue from different perspectives, trust can be built amongst those involved in the risk assessment process. For this reason the bank initiates an ongoing and interactive process for presenting the risk management system and its results with all those who are involved in the process in the bank (management meetings, risk assessments, risk committee) as well as with those bodies with legal status (board with credit committee and ARCC = Audit, Risk and Compliance Committee) and those bodies who deal with the bank regulations.

The controlling department produces detailed quarterly reports regarding all risk areas of the bank for the risk report. The executive board forwards this report to all members of the supervisory board. Once a year the main changes to the business and risk strategy and the current risk situation are presented in the board meeting and the important aspects are discussed.

The ARCC has unlimited access to all the bank's information. The committee is authorised to consult all managers and employees of the bank, including external partners, even without the executive board being present. After previous agreement with the chairman of the ARCC, individual members may also consult these people by themselves.

;6��+7�+��+�/� ��7� �� 4��/�� the executive board has set out the process in writing. These guidelines, as well as the business and risk strategy, are available to all bank employees via the Intranet.

5.2.3 Risk categories

��/�;�6��~��:��+��9+�7��+�/��7��+��+7�+��+5�5�9+�� +6 ��+7�+��7��+�/�

�� 6��6��+�/�� +�6+�+��+�/�� ?��/��+�/

�� +��+�/�� +�/


When organising risk management, risk concentrations of main risks should also be considered. These are investigated and documented as part of the annual risk strategy when considering all areas of risk.

5.2.3.1 Counterparty default risk

We understand counterparty default risk as the risk of our customer or business partner defaulting - in particular due to deterioration in their credit rating. We differentiate between

�� +�� +�/�� 6�� +�/��9��6�� +��unable to meet its obligations and we incur a loss, also in the form of unrealised profits for pending transactions and

�� 6��+�/��+��9��9��4��abroad, have transfer problems due to political or economic crises and therefore result in additional default risks for us.

�� 7� ��6��6��+�/��+7��within the bank. In accordance with the company's policy focussing on small to medium sized corporate customers, the credit management is initially targeted at considering individual risks. The risk assessment is based on a fundamental credit rating analysis which forms together with the assessments for management quality, market position, branch situation as well as forecasts ��+��+�/��5��+��+�+��+��9��4��+�� +��6��4��4��+��9��+��instruments (with equivalent credit amount). Customers with economic dependencies are summarised in risk units.

With regards to credit and counterparty risk, several organisationally independent areas of responsibility take over the management task relating �� 6�� 6�� +�/�� 9�� 4��7� �� 4�/� ��since mid of 2013, issue a regular comprehensive assessment based on the balance sheet and economic situation of the company, the market situation and other factors. Specialist analysts, who are part of a specially set up department, provide a second opinion that forms the basis of the decision-makers decision. In accordance with the size structure of the credit portfolio, the majority of the credits are decided upon in the Kredit Committee Bremen (general management).

Management report

33

The risk assessment of the majority of borrowers is supported by a rating process, which determines the probability of default based on quantitative and qualitative corporate data. These results are the foundation of the risk assessment and the pricing.

Furthermore, the bank is involved in KBC Group's risk management. Borrowers with adverse developments, for which it is unsure whether the �+�6��+��+�� 9��4��9��6�+��4+�+��situation, will be subjected to regular reviews by specialists as part of an overall asset quality review.

In KBC Bank NV the implementation of a risk-oriented management concept based on the Risk Adjusted Return On Capital (RAROC) is well advanced. The aim of the RAROC methodology is to quantify the unexpected losses with determination of a Value at Risk for credit risks and to summarise this in an index together with the income and costs. On this basis a comprehensive risk and earnings analysis for non-banks is possible for all decision makers.

��- of the credit transaction must also be guaranteed in terms of �+�/5��+�� 6��4+�+��4��6+��+��+��up as part of a ROE calculation. It is the aim of all divisions of the bank to continuously improve the return on equity.

The credit exposure in accordance with the bank's risk report consists of revocable and irrevocable limits or the higher utilisation including warranties and guarantees that have been provided, letter of credit obligations as well as credit equivalent amounts of derivatives.

The credit volume of the existing corporate credits, as focussed on by our credit strategy, has decreased from EUR 3,913 mn to EUR 3,485 mn - whilst excluding the defaulted credits in this segment. The attributable expected loss has expanded to EUR 16.1 mn, compared to EUR 15.1 mn in the previous year. The average probability of default of corporate credits is 1.85%, based on one year.

As measured by credit volume, the segment of corporate banking has the largest share with 75% (previous year 77%), which fell however when taking the expected loss at 59% (previous year 61%) into consideration. 34% (previous ��%�� }�� 9��+46�� 6+�+�+��+�7��+7��+�/��6�6��+��46�+��5�|��+:+�+��9+��(previous year 8%) and network desk with 1% (previous year 4%) do not have ��+7�+��+ ��}��5


The other credit businesses from private banking, banks, intercompany transactions, treasury and others amount to a credit volume of approx. EUR 420 mn (previous year EUR 621 mn). Measured based on expected loss of 72 kEUR (previous year EUR 0.2 mn), they are not classed as risk-relevant.

��+�/�� 9+��+��+��+��+��+��according to expected loss in the distribution of credit volume (without defaulted credit). We do not anticipate any losses of 23% (previous year 18%) of the credit volume that consist mainly from revocable credit lines as well as credits that are guaranteed by cash deposits in our bank. At 70% (previous year 77%) the emphasis is naturally on the segment with low to medium loss potential. The share of credit with high expected loss, amounts to approx. 5% (previous year 3%) and these loans are under close supervision. Furthermore, 2% (previous year 3%) of the credit volume was assigned to the credit risk standard approach, in which expected loss was not calculated.

In accordance with the activity codes of our parent company, KBC Bank NV, we will carry out a breakdown by sector that is based on the breakdown of the Belgian banking supervision. The four largest sectors, as measured by management-related credit volumes, make up a total share of 49%: machinery & heavy equipment (14%), distribution (14%), commercial real estate (11%) and chemicals (10%). It is our aim to keep the structural share of individual 4��6��$��+��+��+:��+��+��+�5

~��*��;�� 4��$�*��+��+��:+�+��9��EUR 117 mn and was therefore on the level of the previous year.

In accordance with our business strategy there are only a few receivables to borrowers that are not assigned to Europe. Main country risks are strategically limited. As measured by management-related credit volumes and whilst considering which country the business partner or collateral issuer is based in, the majority consisting of 91% (previous year 88%) is distributed among three countries - Germany, Belgium and the Netherlands. Only 5% is distributed in countries with a B or C rating (see Fitch).

Our stress test considerations are based on different scenarios in which increased default probability or reduced recovery rates are used to simulate deteriorating economic conditions. With different spreads that affect the entire portfolio or part of it, the effects on expected and unexpected loss are measured and assessed.

Management report

35

5.2.3.2 Liquidity risk

With regards to liquidity risk, the bank differentiates between

�� +��:��+�/��+�/��4�+�7�6��4�� 6��future payment obligations in full or on time,

�� +��+�7� �+�/� #+��5� ��+7��6�� +��+�7� �+�/%�� risk of only being able to purchase refinancing resources at increased market interest rates and

�� /�� +�6+�+�� +�/�� +�/��4�+�7��4�� +�6+��assets at a discount on the market due to exceptional circumstances.

The executive board determines the strategic guidelines and limits within which the Treasury (that is based in Frankfurt) takes over operational management. The Control department supervises the position and compliance with the limits and is responsible for the continuous development of the systems and the reporting. In the monthly ALCO meeting the bank's current liquidity situation as well as market developments are discussed and necessary actions outlined. Our concept of liquidity risk management consists of an emergency ��9��9+��:��5

��4��/�� +�6+�+�� 7� �� +��+�� +��6��4�� +��7��+�� +�� KBC Group in three ways:

1. Due to our strategy we are focussed on financing small to medium sized companies, acquisition finance and real estate financing. We are as such focussed on lending business. On the other hand a broad-based private banking business is not our aim. The refinancing must therefore take place on the money and capital market.

2. As a 100% subsidiary of KBC Bank NV we benefit from the good credit rating of the parent company, due to the existing control agreement.

3. We are integrated in KBC Group's global liquidity management and we regard this as stable in view of the current financial market crisis, just as it was during the Euro conversion.


>+��$$��9��:��4��+�7�6��6��+�7��+��'4��/+�7�sector. On the reporting day almost half of our customer receivables were ��67��+�7�6�� +��5�~��6��/�W]��+�7�9��6��+�7��5

To assess the insolvency risk�9��/��+��+��+��9��affects liquidity as well as possible payment obligations from open credit lines and aggregate this in a funding matrix. We then compare this to the liquidity lines that are still open (liquidity cover potential) and determine the liquidity buffer. On this basis we assess the current and future liquidity situation using the given parameters. As part of a review of the concept the parameters were checked once again in 2013 and are also periodically validated. The relevant adjustments were made, as was deemed necessary.

Furthermore, we have a series of quantitative and qualitative early warning indicators that trigger adhoc information for the treasury and executive board when reached.

The maximum utilisation of the liquidity cover potential over an evaluation period of twelve months is 64% and corresponds to an accumulated cash ��9��|�� 5�� +�+�7�46��+��|�"�� 9��+�6+�+��cover potential is utilised to its maximum level. Approximately EUR 218 mn remain until the early warning indicator is triggered. Therefore there are �6�+�� +�6+�� +��4�� 6��:�+��4�� 76�� 6�� obligations at any time.

The �� to be able to achieve additional liquidity at only raised interest rates is essentially explained by the extension of the credit spread for banks or by the deterioration of the own credit rating.

The extension of the credit spread for banks generally leads to a corresponding increase in reference rates (e.g. Euribor) in inter-bank trade. As we have agreed the majority of customer business on this basis or by collecting through interest rate hedges, we could pass on this extension.

A deterioration in the KBC rating would lead to a relatively short-term increase +�� +�7� �� 4�� +7�� +�� +�:�� +�+:��+��5�~��+��+��+�7��6��4��4��+��point is the equivalent of an additional expenditure of approx. 111 kEUR per year.

Management report

37

The market liquidity risk at KBC Bank Deutschland AG relates to the securities portfolio that exclusively consists of Euro government bonds from European countries. As before, the ECB accepts all securities as security for participating in the tendering process so that we can assume liquidity in terms ��+�75�� 4��9�� /��}+��further on and price reductions are only due to the credit risk of the issuers.

The German Federal Financial Supervisory Authority has issued a liquidity policy and the banks' adequate ability to pay is measured against this. The bank has adhered to this principle at all times in past years. During this year ��+�� 6�+��4��+�7��9��4��9��5��and 1.75 (previous year 1.09 and 1.30).

�� 4��/� �� :��+�6�� liquidity stress tests that show whether the �+�6+�+�� +�� :+�� +�� 6�+�� 7+:�� +�� +�+��5� \�� +�7�so, we consider various long time frames, the bank's own and market-wide scenarios as well as historic and hypothetical cause-effect-chains. We also consider the additional liquidity risk as controllable under these stress conditions.

5.2.3.3 Market risk

By market risk we mean the risk of adverse changes in the market prices of ��7+4��+��6�+�+��6��6��+��+��5

��+�/��7��+��+��+��+7�+��+�/��bank whilst currency risks have a lower priority. Options, equity price, real �� +��+�/��}+��+��+7�+��5

The market risk that is relevant to the bank is managed by using derivative ��+��+��6 �� 7��+�7�5

The risk of a change in the interest rate is mainly in the bank's banking book which includes all credits and deposits from commercial transactions, all taken and granted interbank transactions that are used for the bank's liquidity management, the liquidity reserves' securities as well as the concluded derivatives for hedging purposes.


��6��+��+��+��+�/�+��+��6��4�� +�7��and liabilities. With regards to the calculated maturity mismatches, possible changes in present values (sensitivities) are determined on a parallel shift in ��+��6�:��5�=��:��6��}��+ +��4��maturity band and whose compliance is monitored daily.

A Value at Risk (VaR) analysis, as the most important control parameter, is carried out on the basis of historical simulation (review period 500 working ��:��+�7��+��$��%5��:��7��]�|�+��2013 was 211 kEUR: a comparatively lower utilisation of the 750 kEUR limit for interest rate and currency risks. Furthermore there is daily backtesting.

The bank carries out regular stress tests that use hypothetical assumptions and developments from historical international crises.

�+�� 7�� 6+�� ++��+�� +�� 4��/� �6��6�� long-term investment strategy in the past and invested in medium to long-term European Euro government bonds. A large proportion of bonds, in particular all PIIGS bonds, were sold in the fourth quarter of 2013. The VaR calculation for this portfolio produces now a value of only 55 kEUR. In determining this VaR, our bank also uses the model of historical simulation with the same parameters as when managing other interest rate risks.

In the monthly meetings the ALCO analyses also the risk situation whilst considering the medium to long term expected interest rate trend and decides upon the necessary next steps and introduces them.

Transactions that are currency rate linked are only concluded as part of the customer business and are mainly directly covered within the Group. The total of open currency transactions must not exceed the 500 kEUR limit so ��+7�+��6��+�/��+��5

The bank does not currently participate in equity proprietary trading or commodity trading. The daily monitoring of the proprietary position by the ��+�7�� 6�� 6�� +7�+��risks under a worst-case scenario.

Management report

39

5.2.3.4 Operational risk

��+��+�/��+�/��+��6��6��6+��4+�+��or failure of internal processes and systems, people or as a result of external +��6��5� �� +��+�� 4��9�� 7��+��+�� +�� 6��employees and external factors when determining possible causes of failure. ��+��}��+��6��6��+��6��6��the manipulation of the balance sheet.

To contain the operational risks and in addition to separating functions, the bank has also introduced controls to detect weaknesses at an early stage. The particular importance of the IT systems is taken into account in that the relevant back-up solutions are always available at short notice in the head ��4�/'6�� +�� 4��/5��+:�� 4�/'6��systems is regularly monitored using various emergency plans and recovery scenarios.

The bank regularly examines whether its organisational structures comply with the minimum standard that applies to the entire KBC Group with regards to internal control and security measures. The results obtained during a continuous investigation are measured against this standard and adjusted if necessary.

We are continuously developing our risk process which helps to constantly improve our risk awareness in all divisions. In 2013 four risk inventories were carried out in the areas "Human Resources & Organisation", "Risk Management, Compliance, OPR", "Loans" and "Accounting". The frequency of individual inventories is derived from a risk map that is continually updated and which assesses all processes/business segments according to their risk and the existing controls. The risk map allows also for a three year plan. \��+�� +�/�� :�� +�� 4��/�� +�/� +�:��5� ��executive board decides on what steps are to be taken in every individual case. In case of risk mitigation, there is a central follow-up by the local operational risk committee, which met a total of four times in 2013. The board is briefed at least once a year on the results and decisions.

The bank runs a loss database in which all losses from operational risks are aggregated. In 2013 there were 23 cases of loss with a total net loss of 91 kEUR.


The bank has also implemented the necessary early warning indicators with regards to operational risks which shall detect possible risks at an early stage. In human resources, for example, quarterly statistics on labour turnover, overtime and sickness are reported which alert exceptional trends using a ��+7�� 5

As part of the stress test process we are dealing with the outcome of three scenarios: following an epidemic 30% to 40% of our employees are absent, three large borrowers default due to manipulation of the balance sheet and we simulate a temporary interruption in the process of payment transactions. Furthermore, we calculate a quantitative stress test based on historic loss cases. The risks that result from this are controllable.

5.2.3.5 Other risks

With regards to other risks, the bank attributes only a medium risk potential to the risk from capital management; the other risks play a less important role. The scarce resource "capital" must be invested as best as possible. For this purpose the annual planning of the income statement is supplemented with a capital planning that indicates the trend of capital items over the next 3 years. Therefore regulatory changes, such as the current selective approach of supplementary capital, are also particularly necessary, so that action can be taken at an early stage, if necessary. Supplemented by planning �+�/'9�+7��+��6+��+��9+�7��+��can therefore be derived.

5.2.3.6� ]��)��-

The concept of risk-bearing capacity that was introduced in 2007 was also further developed in 2013. As before the aim is to quantify the bank’s risks on the one hand and - if necessary, when considering the interactions #��+��%� '� �� 77��7�� +�� :�� +�/� ��5� �� hand, the coverage potential is also to be calculated that is to be available for absorbing risk in the event of risk.

The risk-bearing capacity is then always given when the coverage potential 7+:��}��:��+�/��+�+��5��}��+��9��compare how high the degree of utilisation of the risk coverage potential is.

Management report

41

The risk-bearing capacity of KBC is guaranteed and monitored by three views. These are

1. the periodic,2. the economic and finally3. the regulatory

risk-bearing capacity.

The three-way split is in line with the separate accounting entities or interests of the target group between which there must be no inevitable identity. The risk-bearing capacity must be guaranteed in each of the listed perspectives.

=�� +��+� ��+:�� :�� +�� 5� �� +��+��+4��+�/��6��}��+��#+��the event of cut-off date of analysis being 31st December). This view regards the potential negative deviation of the results from the planned value in the results as a risk. To measure the risk coverage potential the bank uses a going concern approach, according to which, and other such approaches, only such equity components are assessed that are not linked to the compliance of the minimum solvency requirement, which we have set at 8.4% for equity capital.

The bank uses a liquidity approach in the economic view. The aim of this approach is to still be able to guarantee complete service to the creditors +��}��+�+�6��4��/��:��+��+�/��+�6��5�� +��+�+��+�/��9��6��:��6��+�/��asset value. Risks that are incurred correspond with a negative change in the ��:��6��+5�5��6��+�7�� +��+�/��6��+�� }+ 6 ��}��7��+:��:��6��7��7+:��:��+��5�~��+�/�� +��:��5��+��9��calculating the present value risk.

The supervisory assessment of adequate equity focuses on the ratio of equity ��+�/'9�+7��5�~��6��6+��+��6 ��9��+��does not fall below 8%. As of 31st December 2013 the rate was 13.23%.


A stress test that assesses all risk types supports the analysis of the effects of a deep economic downturn on the risk-bearing capacity of the 4��/�+�� +�:+�95��+��+:��+��+�� +��+��stress test in which the deep economic effects, as a result of insolvency of the investment bank, Lehman Brothers, have been studied by the bank on the key areas of risk.

��+7�+��+�/�� 4��/�46��parts of the risk coverage potential. With regards to the credit risk, we assume a PD increase of 56% and a credit spread increase of 593bp for liquidity risk. With regards to the market price risk from securities, we use historic changes in the evaluation of the change in interest rates that are dependent on the term and rating on the actual initial situation. When calculating the coverage potential under stress the hidden reserves/encumbrances from the interest book as well as from securities are calculated with stressed market data.

The risk-bearing capacity was quoted in all views, simulations and stress tests on the 31st December 2013 as well as during the year.

5.2.3.7 Concentration of risk

We regard concentration risks as those which arise from an uneven distribution of counterparties in credit or other business relationships or from the creation of sectorial or geographical business focusses and which are capable of generating such large losses that the institution’s solvency is threatened.

We see important concentrations in the following areas:

�� +��+�7��6��4�+�7��6��6�� 9�banks; there is no broad spectrum. As a main source of refinancing, the KBC Group occupies a special position: the liquidity facilities accepted by us that amount to EUR 1.3 bn represent an upper limit of borrowing for us.

�� 7+��+��+��4��/��7��+��our income does apply to net interest and commission income that are mainly the result of lending transactions.

Management report

43

As part of our business model we strive to counter the risks in all areas, e.g. by ��:��+�7��+:��+�7��6��4��}��+�7�� +��+��business that is not credit dependant.

5.3 Summary

The executive board believes that overall an effective control instrument has been established, which provides the management team and also the supervisory board on a regular basis with an up-to-date and detailed overview of the current and future risks to their business.

Note:

The graphics next to the text are only intended for additional information and do not form part of the legal management report.


I General

�� +�� +�� $�*� � ��+�� 9+�� relevant provisions of the HGB (German Commercial Code). Furthermore, it also complied with the German Ordinance on Accounting Policies for Banks (RechKredV) as well as the German Stock Corporation Act (AktG).

In accordance with § 244 of the HGB (German Commercial Code), all amounts are quoted in Euro.

��+��9+��\=|>��6��+�� 4��+��6��+��+�7��+�� +��6��W]��6��5

The only subsidiary of KBC Bank Deutschland AG, with a share capital of 51,129.10 EUR (100 kDM), is Vermögensverwaltungsgesellschaft Merkur mbH, Bremen, hereinafter called Merkur.

?��/6��4�� 7��+��9+��/�;�6��~�5�~��loss transfer agreement has been concluded between KBC Bank Deutschland AG and Merkur as the 100% subsidiary and this is also recognised for tax �6��5�\��+�7��/��|��9��7��9��paid to KBC Bank Deutschland AG.

Merkur's balance sheet totals contributed 1,052 kEUR on reporting day, of which 901 kEUR related to property ownership. This corresponds to 0.04% of the balance sheet total of KBC Bank Deutschland AG.

In accordance with § 296 para. 2 of HGB (German Commercial Code) the ��+��+��+�� 9��6�� the minor importance of the subsidiary.

NotesFR

AN

KFU

RT

45

II Accounting and valuation methods

�� 6�+�+�� }�� 9+�� 4�� :��6�� +�7� �� 9��value principle (§ 253 para. 3 HGB).

The receivables were basically valued at nominal value; the difference between the amount paid out and the nominal amount is shown as accruals and deferrals in the balance sheet and is periodically recognised as income.

We have formed suitable individual loan loss provisions and provisions for all risks that are foreseeable in the credit business. Latent credit risks have been taken into consideration by a general loan loss provision (GLLP). The calculation of the GLLP is based on the FMF letter dated 10th January 1994, whereby the balance sheet notes were recorded in the assessment basis of the GLLP in accordance with the statements of the IDW (Institut der Wirtschaftsprüfer - Institute for Auditors).

��7+4��}��9��+��7+4��:��6��6��by scheduled depreciation in accordance with the expected useful life.

The low-value assets are recorded as compound items and depreciated according to § 6 para. 2a EStG (German income tax law).

Liabilities are carried at the repayable amounts. The difference between the nominal value and the issue value of liabilities is included in the accruals and deferrals and written off periodically.

Provisions for uncertain liabilities and potential future losses have been recorded in an adequate amount. Therefore provisions with a remaining term of more than one year were discounted (§ 253 sect. 2 HGB).

Provisions for pension and similar obligations were valued according to the projected unit credit method. For the calculation on 31st December 2013, the average market interest rate of 4.89%, published by the Bundesbank (Federal bank), for a residual term of 15 years, annual wage increases of 1.5% and annual pension increases of 2.0% as well as the 2005G guidelines compiled by Klaus Heubeck were assumed.


We have made use of the option to accumulate the balance of 2,144,985.00 EUR of the initial valuation according to BilMoG (German Accounting Law Modernisation Act), Art. 67 para. 1, s. 1 EGHGB (Introductory Law to the German Commercial Code) over 15 years, so that on the reporting date of 31st December 2013, compared to 31st December 2009, 571,996.00 EUR will be additionally deferred. The remaining balance of 1,572,989.00 EUR will be accumulated in the period of 1st January 2014 to 31st December 2024.

Based on the existing asset surplus and using the option according to § 274 HGB (German Commercial Code) no deferred tax liabilities were reported. The surplus of deferred tax assets mainly results from deductible temporary differences in the balance sheet positions "tangible assets" and "provisions" for which there are no taxable temporary differences. The valuation of deferred ��}��+�� 6��6�+�7��}��+��+��6��or company and which is expected to be valid at the time of realisation. A tax rate of 31.41% was used for the company (which includes corporation tax of 15.83% including a solidarity tax contribution and a trade tax rate of 15.59%).

The other provisions include in particular provisions for human resources and for the credit business.

The currency conversion for assets and liabilities in foreign currency is carried out in accordance with § 340h HGB in conjunction with § 256a HGB (German Commercial Code). Receivables and liabilities in a foreign currency were valued at the time at the foreign exchange reference rates published by the European Central Bank on reporting day. The bank uses the option of special coverage. All currency positions (assets, liabilities and pending transactions) are overtaken in a controlled currency position and by currency. The results are shown in the income statement under "other operational incomes" or

"other operational expenses".

NotesD

ÜSS

ELD

OR

F

47

The valuation of currency risks is carried out using the "Luxembourg model". Therefore the currency forward transactions are split into the spot rate that is subjected to the currency risk and the swap rate that is subjected to the interest rate risk. The spot rate was converted at the prevailing foreign exchange average rate.

There was no risk of a change in the swap rate that needed to be balanced on the reporting day.

In accordance with its hedge strategy, the banks forms valuation units according to § 254 HGB to hedge currency risks from currency options and ��7��+��+�/�� 5��+�� +��hedges (critical term match). Due to the creation of valuation units for all options transactions, the received and paid premiums with their book value are detailed in the positions "other assets" and "other liabilities". The bank therefore avoids negative valuation effects of a total of 2,302 kEUR, which consist of the following:

The derivative products were valued, in so far as they did not relate to hedging transactions, according to the principle of individual valuation of open positions. These derivatives form part of the management of the bank book as individual transactions. On reporting day it was not necessary to create a provision.

in kEUR Other assets Other liabilitiesCaps, Floors, Collars - 446 178Foreign exchange options - 467 1,211


��"��?��^_]X 2013 2012

`��(��XOther receivables from credit institutionsof which a remaining term of - up to three months - more than three months and up to 1 year - more than 1 year and up to 5 years - more than 5 years

({#��|

3,5438,5336,663

11,408

|$#}|�

26,3737,434

27,18911,880

`��XReceivables from customersof which a remaining term of - up to three months - more than three months and up to 1 year - more than 1 year and up to 5 years - more than 5 years� '�9+��6��+��

�#*$�#�$�

241,20198,293

740,324249,632594,971

$#�(}#{}�

224,896159,039820,385396,725537,040

`��X��)��"��of which a remaining term of - up to three months - more than three months and up to 1 year - more than 1 year and up to 5 years - more than 5 years

�*|#��

132,22259,4056,038

0

�((#{$$

5,2894,211

56,59366,929

II.I Selected positions from the balance sheet and income statement

II.I.a Breakdown by maturity of assets

NotesM

UN

ICH

49

II.I.b Breakdown by maturity of liabilities

��"��?��^_]X 2013 2012

��XLiabilities to other credit institutions with ��"��#including a remaining term of - up to three months - more than three months and up to 1 year - more than 1 year and up to 5 years - more than 5 years

|�*#}��

198,19075,031

475,86110,784

�#(**#{(�

572,185276,849550,000

0

��$��XLiabilities to customers from savings depositsthereof with a remaining term of - up to three months - more than three months and up to 1 year - more than 1 year and up to 5 years - more than 5 years

�#{{�

9931100

�#��$

1,14210

00

��$��XOther liabilities to customersthereof with a remaining term of - due daily - up to three months - more than three months and up to 1 year - more than 1 year and up to 5 years - more than 5 years

�#��*#��

290,242489,631339,643

00

*�$#{�(

277,736409,151225,126

00


II.I.c Statement on relationships with associated companies

The relationships with associated companies on balance sheet day are detailed in the following table.

Asset values in kEUR 2013 2012

Receivables from credit institutions

Receivables from customers

Other assets

Liabilities to credit institutions

Liabilities to customers

Liabilities from guarantees andwarranty agreements

7,145

14,531

10

183,068

1,866

0

20,969

14,996

12

661,712

3,388

0

Nominal value in kEUR 2013 2012

Derivatives with credit institutions

Derivatives with customers

1,019,857

0

1,609,752

0

II.I.d� ��)��

��+��+�7��4��+��64�+��+�+��+��$��#4��/�:��6�59,992 kEUR) the bank's investment portfolio only changed slightly, however substantially with regards to its composition. From now on the portfolio is comprised of no bonds from PIIGS countries, instead the portfolios of Belgian and Dutch issuers were extended.

in kEUR 2013 2012

Opening balance

Sales

Purchases

Disposals

Value adjustment

Depreciation

Pro rata interest components

133,022

-94,531

166,998

-6,430

0

-3,831

2,437

145,906

-238,335

315,777

-89,526

0

-153

-647

Balance sheet �*|#�� ((#{$$

Notes

51

In �� securities, total sales of notional 93,000 kEUR were completed, of which 43,1000 kEUR was from PIIGS countries. The simultaneous +��}��4��$$$�/��|��:��6��6��+�+�7��+�7��+4+�+��'��6�+�+��7��5

=6�� +��$�*��$$�/��|�9��4��+��}��5

��+��+��6+�+�+��6�+�+��}��9��"�$�/��|��6��$�*5��+��+��9��$$��kEUR and the additions were 57,851 kEUR. Write-offs were not necessary. ��:�+��9�+��'�� }��9��/��|�9�+��+��reserves accounted for 354 kEUR.

The bank's liquidity reserve increased by 105,000 kEUR in 2013; this served, on the one hand, as compensation for the maturing of the debt issued by public sector issuers at the start of 2013 and, on the other hand, as provision of adequate securities at the ECB.

As a result on 31st December 2013 a portfolio totalling 197,665 kEUR consisted of

�� +}��9+��4��/�:��6��5��/��|��

�� +�6+�+�� :�� 9+�� 4��/� :��6�� "�� /��|� #��depreciation).


II.I.e Shares in associated companies

The bank is associated with the following companies:

It relates to a 100% participation in Vermögensverwaltungsgesellschaft Merkur mbH, Bremen (subscribed capital 51 kEUR (100 kDM)). There is a ��7�� 5�\��$�*��/��|�9��+:��by the bank.

II.I.f Investments

The bank has the following investments:

InvestmentsPercentage

of totalBook value

in kEURAKA Ausfuhrkreditgesellschaft mbH, Frankfurt am Main 85 0.42 % 256

Bürgschaftsbank Bremen GmbH, Bremen 33 1.01 % 23

Liquiditäts-Konsortialbank GmbH, Frankfurt am Main 40 0.02 % 26

S,W,I,F,T, Society for Worldwide Interbank Financial Telecommunication SCRL, La Hulpe, Belgium

19 0.01 % 19

Total 324

in kEUR 2013 2012

Historic acquisition costs

Additions

Disposals

Accumulated depreciation

51

0

0

0

831

0

780

0

Net book value 51 51

Shares in associatedcompanies

Percentage of total

Book value in kEUR

Vermögensverwaltungsgesell-schaft Merkur mbH, Bremen 51 100.00 % 51

Total 51 51

Notes

Nominal value in kEUR

Nominal value in kEUR

53

in kEUR 2013 2012


Additions

Disposals


324

0

0

0

324

0

0

0


II.I.g Intangible assets

in kEUR 2013 2012


Additions

Disposals


2,714

460

0

2,661

2,549

179

13

2,429


�� +��+�� +�� 9�� **� /��|� #��:+�6�� kEUR).

II.I.h Tangible assets

�� +��+�� +�� 9�� **� /��|� #��:+�6�� kEUR), of which 16 kEUR for low-value assets (previous year: 23 kEUR).

The real estate and buildings shown are used for bank purposes.

Tangible assetsReal estate and

buildingsOperating and

business equipmentTangible assets

totalin kEUR 2013 2012 2013 2012 2013 2012


Additions

Disposals


4,237

0

0

2,900

4,237

0

0

2,824

4,794

370

506

3,608

4,662

531

399

3,652

9,031

370

506

6,508

8,899

531

399

6,476

Net book value �#((| �#��( �#{�{ �#��$ $#(}| $#��


II.I.i Foreign currency position

The foreign currency positions are broken down as follows:

in kEUR 2013 2012

Receivables from credit institutions

Receivables from customers

Other assets

Liabilities to credit institutions

Liabilities to customers

Other liabilities

18,906

67,782

2

40,497

4,062

1

18,866

139,834

25

131,637

51,609

1

Contingent liabilities 63,634 50,975

II.I.j Other assets and liabilities

The other assets totalling 7,370 kEUR consist mainly of receivables to the ��}�� 6��+�7��/��|��6��6�� *��/��|��well as receivables from interest rate swaps amounting to the value of 1,339 kEUR. Furthermore, the receivables from currency options totalling 2,156 /��|��+�� +6 �� +�7��/��|�are shown here.

The other liabilities totalling 5,720 kEUR mainly relate to liabilities from interest swaps amounting to 2,115 kEUR as well as premiums received from currency ��+��+�7��"$��/��|�� 6��+�7��"�kEUR.

II.I.k Collateral transferred for liabilities

With regards to liabilities to credit institutions, assets amounting to 497,732 kEUR which were used as collateral, were transferred.

On the balance sheet date securities amounting to 196,898 kEUR (open market operations) and receivables totalling 295,694 kEUR (at the German Federal Bank) were in the custody account.

On the balance sheet date, the overall utilisation date at the German Federal Bank stood at 476,255 kEUR.

Notes

55

II.I.l Accruals and deferrals for assets/liabilities

The deferred expenses and accrued income of 261 kEUR mainly consist of deferred income from promissory notes as well as other smaller accruals.

The deferred income and accrued income of 74 kEUR is made up of accruals from promissory notes amounting to 21 kEUR and income from forfaiting transactions totalling 53 kEUR.

II.I.m� ��

��++��+��+��$�$$$�/��|�9��76��4��concluded on 19th March 2001 with KBC Bank NV.

~��++��+��+7�� 6+�� +��+��liable equity capital. On 4th March 2009 the maturity was extended to 31st May 2018.

II.I.n Share capital

Share capital amounts to 14,502,794,21 EUR and is divided into 567,300 bearer shares. The shares are issued in bearer form. During the AGM on 4th March 2009 a decision was made to extend the authorised capital to 7,250.000.00 EUR. No use has been made of this authorisation to date.

II.I.o Capital reserves

~��4�7+��+�7��+��$�*��/��+��:��totalled 90,126,115.89 EUR.

II.I.p Retained earnings

The stock of other retained earnings was 101,809,559.92 EUR at the start of �$�*��67��6�� +��+��5�;6�+�7� ��~�?��=�4�6��2013 a decision was made to pay out 2,382,660.00 EUR from the net earnings 2012 as dividends.


II.I.q� Z��

The contingent liabilities (off-balance sheet) consist of no individual contributions that are of major importance with regards to the bank's overall activity. This relates solely to transactions as part of customer credit ��+��5��4��/�6��+�/��+��+��9��+�7�+��+��to assess the probability of default. On this basis it can determine the risk of default of contingent liabilities.

�+��7��7'�� 7�� 9+��}�� 6��$��+��4�+7��+�� 6��/��|5

��9��+��4�+7��+�� + ��+�7�day.

II.I.r Contingencies not reported on the balance sheet

Regarding our share in the Liquiditäts-Konsortialbank GmbH there is an additional funding liability of up to 200 kEUR. The payment of additional funds, which can only be demanded on the basis of a corporate resolution, is to be made according to the ratio of shares in the business. To comply with funding liabilities of a shareholder, from which a payment cannot be obtained, the other shareholders belonging to the Bundesverband deutscher Banken e.V. (Federal Association of German banks) are responsible as guarantors in proportion to their number of shares held.

II.I.s Other obligations

�+��7��+��:��4��+�� +� ��+�� 4��/�credits, of which 1,522 kEUR has a remaining term of up to one year and 319,074 kEUR a remaining term of more than a year. Individual positions that are of importance with regards to the bank's overall activity are not included.

Notes

57

II.I.t Other administration costs

Major costs consist of the IT support provided by the parent company of 1,547 kEUR, expenses for cost reimbursements to the parent company of 914 kEUR, compulsory contributions of 1,093 kEUR, expenses for human resources services of 699 kEUR, other IT costs totalling 619 kEUR, travel expenses totalling 406 kEUR and legal expenses of 329 kEUR.

II.I.u Extraordinary expenses

Extraordinary expenses exclusively relate to the pro rata accumulation of the difference in the BilMoG initial assessment of the pension provision with the context of art. 67 EGHGB (Introductory Act to the German Commercial Code).

II.I.v Other operational costs and income

With regards to the other operational costs, these mainly include the expense of allocating the provision for damage caused by contract breach totalling 845 kEUR and the interest paid for pension provisions in accordance with BilMoG amounting to 506 kEUR.

The other operational income mainly consists of net gains from the currency valuation totalling +1,522 kEUR. Furthermore the position income from cost reimbursement shows 220 kEUR as well as reversals of provisions with 344 kEUR.

II.I.w� ~��"��"��

�� +�+�� }�� 6�� /��|� �+��+��++��}��}��+�6��+��5


III Forward transactions

As part of derivatives trading, the following outstanding types of transactions existed on the day of reporting:

The price risks resulting from forward transactions are monitored and limited in the context of the relevant control model.

Nominal amount in EUR

up to 1 yearremaining

term

�)��-��remaining

term

over 5 yearsremaining

term Total

!��)��

Interest rate swaps

EUR

other currencies

Cap

Floor

�}}#��#}�(

99,423,732

88,722,131

�*#{{{#{{{

�|#��#$*�

��#$$(#$*�

563,687,230

47,536,064

$$�#|*|#�$*

�|#��|#{�(

��#�{*#�*(

143,475,491

17,934,002

�#�}�#(��

*�{#||}#��{

806,586,453

154,192,197

$|�#*}$#**�

��#*(�#((}

Z��-)��

Forward exchange transactions

USD

PLN

SEK

GBP

RON

JPY

other currencies

*}�#$|�#*�|

623,895,801

183,830,596

49,217,832

40,493,336

26,008,042

15,410,940

42,419,410

�{#}}�#{**

15,270,389

25,741,331

11,581,314

8,293,065

�#{�$#��$#{��

639,166,190

209,571,927

49,217,832

40,493,336

37,589,356

23,704,005

42,419,410

Cross currency swaps �$#(�}#|$} �$#(�}#|$}

Foreign exchange options

USD

GBP

other currencies

${�#�|}#�*�

171,944,689

11,635,888

17,597,617

(�#��$#��

35,542,444

$(�#|${#�(}

207,487,133

11,635,888

17,597,617

Z��)!]< $(#|��#��| $(#|��#��|

Notes

59

IV Fair values ��&��&��"��

Every working day the bank provides the market values for the derivatives using the external computer programme PMS, which is provided by much-net ~��+��5��6��:��6��9��+�� /��value of a transaction. The calculation that is carried out is based on current exchange rates, yield curves and volatility factors, provided that it relates to option contracts. This market data is provided by Thomson Reuters.

At the end of the year the relatively high market values, in particular for the partial portfolios of interest rate swaps and currency forward transactions, are the result of an isolated view of these portfolios without considering the parts of the entire portfolio that appear in the balance sheet.

On the one hand, the bank operates the derivative business with customers. Therefore the transactions undertaken by the customers are immediately covered by the banks, in particular within KBC Group. These transactions themselves, and also in the group, represent a closed position, from which only the present value of the margin leads to marginal market values.

On the other hand, derivatives are used to manage the balance sheet ��6�6��5�?��/��+�/��+��}��+��+��6��exchange related transactions is primarily eliminated or reduced on an individual transaction level by using interest rate swaps. Furthermore, hedges �� 6�� 575� ��+7�� 6�� +�� 9+�� }�� +�� of under 1 year are swapped into corresponding Euro transactions using currency forward transactions. This takes place in the light of the bank not wanting to enter into considerable interest rate positions in foreign currencies and by using the swap the management can be carried out in Euro. Hedging transactions do not qualify as valuation units in the context of § 254 HGB (German Commercial Code).

in kEURNegative fair value

Positivefair value Total

Interest rate swaps (incl. cross-IRS) Caps (incl. caps from collars) =��#+��5�� %

- 20,186- 133- 213

12,774133213

- 7,41200

Forward currency transactionsCurrency options

- 16,368- 3,114

16,8703,114

5020


\��+��+�+��9��4��:��6��6�+�7��+��:��6��negative market values of the derivatives would be compensated by positive fair values of the balance-sheet transactions. A provision for anticipated losses as part of the loss-free valuation of the bank book did not need to be formed as the bank as a whole, taking into consideration the expected ��+�7��+�/�� +�+��+:��9��+�+:��:��6��the entire interest rate book.

The bank uses the present value approach for proof of the loss-free valuation.

V Other information

V.I Employees

Number of active employees as an annual average:

Employee statistics as of 31st December 2013 (excluding board)

Male Female Total117 65 182

Age in yearsMale

Number PercentFemale

Number PercentTotal

Number Percent

up to 25

up to 45

up to 65

1

50

66

0.9

42.7

56.4

3

34

31

4.4

50.0

45.6

4

84

97

2.2

45.4

52.4

Total 117 100.0 68 100.0 185 100.0

NotesST

UTT

GA

RT

61

V.II Mandates

Mandates of board of directors were not observed.

V.III Parent company

The KBC Group NV, Havenlaan 2, 1080 Brussels, Belgium, was formed during the merger of KBC Bank and Insurance Holding NV, Brussels, and Almanij NV, Antwerp. On 31st December 2013 its share of KBC Bank Deutschland AG remained unchanged at 100%.

A control agreement was concluded between KBC Bank NV and KBC Bank Deutschland AG on 27th April 1989. This is closed for the period up until 31st December 1993 and shall be extended by one year if one of either contract partners does not cancel, whilst observing the one year notice period. The contractual relationship continues to exist. KBC Bank NV is obliged to offset the net loss that accrued during the term of the agreement, insofar as this is not compensated by a withdrawal from other retained earnings (§ 266 Abs. 3 A III 4 HGB in connection with § 340a II HGB in connection with form 1, liabilities 12c, cd RechKredV), which have been allocated during the term of the agreement.

On 6th December 2012 this agreement was amended to cover extraordinary termination. This amendment was entered in the Companies Register on 17th January 2013.

The KBC Bank NV belongs 100% to the KBC Group NV, Havenlaan 2, 1080 Brussels, Belgium. The consolidated accounts of both companies are held at the Belgian Nationalbank, de Berlaimontlaan 14, 1000 Brussels, Belgium.


VI Executive and supervisory boards

VI.I Executive board

Axel Bartsch (Chairman) Executive board of the bank

Michael Wolber Executive board of the bank (until 30th June 2013)

Umberto Arts Executive board of the bank (1st March 2013 - 2nd December 2013)

Guy Snoeks Executive board of the bank (from 2nd December 2013)

VI.II Supervisory board

Dr. Wolfgang Schrörs (Chairman) Managing partner, Dr. Schrörs Vermögensverwaltungs GmbH & Co. KG, Bremen

Dr. Klaus Ridder (deputy chairman) retired

Dirk Mampaey Senior General Manager Corporate Services KBC Bank NV, Brussels

Luc Gijsens CEO Merchant Banking KBC Bank NV, Brussels

Manfred Jarczak Employee representative for bank employees KBC Bank Deutschland AG, Bremen

Konrad Markus Rempe Employee representative for bank employees KBC Bank Deutschland AG, Bremen

Notes

63

VI.III Remuneration

In 2013 the total remuneration of the executive board was 743 kEUR and 47 kEUR for the supervisory board. The total remuneration for former members of the executive board and their surviving dependants was 181 kEUR. Pension obligations totalling 1,516 kEUR were set aside for these individuals.

On the balance sheet date credits were used as follows :

The credit incurred 6.5% interest.

VI.IV Auditor's fee

236 kEUR net (previous year 172 kEUR) was calculated for the audit of the ��+�� 6��:+��/��|��#+��:+�6��year 121 kEUR), and for other services 8 kEUR net (in previous year 0 kEUR).

VI.V ��

��}�6�+:��4�� 6�� +�� $�*� ��+�7�12,195,757.93 EUR to pay dividends of 21.49 EUR to the shareholder, of which there are 567,300 shares, which equates to 12,191,277.00 EUR. It proposes ��:��"�"�$5�*��|��9��+��5

Bremen, 13th February 2014

KBC BANK DEUTSCHLAND AKTIENGESELLSCHAFT

THE EXECUTIVE BOARD

Axel Bartsch Guy Snoeks

Executive board membersSupervisory board membersCEO of the subsidiary

kEURkEURkEUR

600


�� :�� 6�+�� 6�� +�� +�+�7� �� 4�� +�� +�� together with the bookkeeping system, and the management report of KBC ��/�;�6��~�� 6��$�*��31 December 2013. The maintenance of the books and records and the ��+�� 6�� +�� 7� �� in accordance with German commercial law are the responsibility of the Company’s management. Our responsibility is to express an opinion on the ��6��+�� 7��9+��4��//��+�7�� management report based on our audit.

�� 6�� 6�� 6�+�� 6�� +�� +�� with Sec. 317 HGB [“Handelsgesetzbuch”: German Commercial Code] and �� 7�� 6�+��+�� promulgated by the Institut der Wirtschaftsprüfer [Institute of Public Auditors in Germany] (IDW). Those standards require that we plan and perform the audit such that misstatements materially affecting the presentation of the ��+��+�+��6��+��+��6��+��statements in accordance with [German] principles of proper accounting and in the management report are detected with reasonable assurance. Knowledge of the business activities and the economic and legal environment of the Company and expectations as to possible misstatements are taken into account in the determination of audit procedures. The effectiveness of the accounting-related internal control system and the evidence supporting the �+��6�� +�� 4��/�� 6�� +�� the management report are examined primarily on a test basis within the framework of the audit. The audit includes assessing the accounting principles 6��+7�+��+ �� 4�� 7� ��9��:��6��+�7��:��+��6��+�� 7� ��report. We believe that our audit provides a reasonable basis for our opinion.

Our audit has not led to any reservations.,

Audit opinion

65

\�� 6�� +�+�� 4�� +�7�� 6�� 6�+�� 6�� +��statements comply with the legal requirements and give a true and fair view of ��+��+�+��6��+�� +��accordance with [German] principles of proper accounting. The management �� +�� +�� 9+�� 6�� +�� 9��provides a suitable view of the Company’s position and suitably presents the opportunities and risks of future development.”

Hamburg, 14th February 2014

Ernst & Young GmbHWirtschaftsprüfungsgesellschaft

Frank Bühring Lutz MeyerWirtschaftsprüfer Wirtschaftsprüfer[German Public Auditor] [German Public Auditor]


During the four meetings of the supervisory board that took place in the ��9��:��4�� +:��4�+�� +��+��development, important business results and on the bank's strategy and plans. We have advised the executive board and have monitored its management. The executive board has briefed us in detail and in a timely and regular manner and submitted all issues for which a decision was needed by the supervisory board. Between meetings the executive board informed us in writing of other events.

The executive board also regularly reported on the business policy and other basic questions regarding corporate management and planning, ��7��+��:�� 4��/��+�6��+��4��/��+�/�management system as well as transactions and results that were of great �+7�+��4��/5

Meetings of the supervisory board

;6�+�7�� +�7��25th February 2013 we dealt with the auditor's ��$��+�� +��+�� 7��+�7��approved the balance sheet for 2012.

During the meetings held on 7th June 2013 and 2nd September 2013 we were briefed on the bank's business development, the bank's current risk situation and the status of the purchase process and made decisions in this respect.

Important points of the meeting held on 2nd December 2013 were the bank's risk report from 30th September 2013, the business and risk strategy for 2013/2014 as well as the shareholder’s report regarding the status of the sales process.

\�� +�7��9��6��6��6�+�+�7��6�+��+��9+��for control and transparency in the corporate division (KonTraG).

Committees of the supervisory board

The supervisory board received regular reports on the work of the committees. Four credit committee meetings and two audit, risk and compliance committee meetings took place.

Supervisory board‘s report

67

Particulars

During the constituent meeting of the supervisory board on 5th March 2014 we re-elected Dr. Wolgang Schrörs as our chairman and Dr. Klaus Ridder as vice chairman.

Financial statements

Representatives of the auditors took part in the board of Director's accounts review meeting on 5th March 2014 and provided supporting information.

��6��+�7��+�� 7� ��~��for the period 1st January to 31st December 2013 were audited by Ernst & Young AG Wirtschaftsprüfungsgesellschaft (auditors), Munich and are issued 9+��6��6��+��6�+��+�+��5��6��:+��4��/��9��7��6�+�� 5� \�� 6�+�� +�� *�� ;�� 4�� management report and the executive board's proposal for allocation of ��5�W��4��+��:��4��+��5

��6��:+��4��:��+�� 4��executive board; it is thus approved. The supervisory board concurs with the ��+��5

The supervisory board expressed its gratitude to the management and also in particular to the employees and workers' representatives for their high degree of commitment that has led to the bank's success in recent years.

Bremen, 5th March 2014

THE SUPERVISORY BOARD

Dr. Wolfgang SchrörsChairman


Bremen Wachtstrasse 16 Telephone28195 Bremen FaxGermany email

+ 49 (0) 4 21 - 36 84 - 0 + 49 (0) 4 21 - 36 84 - [email protected]

Corporate banking Marko Richling Helke FriedrichWilfried Monsees

Private banking Axel Kammeyer Jörg BaumhöfnerHermann MüllerJörg Schreiber

!�� Dirk Stamer

Service intern Norbert Schön

Credit analysis and processing Chris Eggert

]�� Jennifer Lutz

Audit Andreas Akmann

HR and legal Jochen Bethge

Compliance Werner Ullmann

Strategic methods andprocesses for bank management

Roland Kleffmann

Berlin Lietzenburger Strasse 69 Telephone10719 Berlin Fax

+ 49 (0) 30 - 203 07 - 0 + 49 (0) 30 - 203 07 - 50

Corporate banking Gerd Sewerin Sarah Berger

Düsseldorf Königsallee 106 Telephone40215 Düsseldorf Fax

+ 49 (0) 2 11 - 130 75 - 0 + 49 (0) 2 11 - 130 75 - 47

Corporate banking Thomas Kempe

Thomas BraunAnke MüllerDirk RombaThomas Wroblewski

Network desk André van den Breen Real estate Tibor Rajcsanyi

Your contacts

[��

Branches


69

Frankfurt Voltastrasse 81 Telephone60486 Frankfurt Fax

+ 49 (0) 69 - 75 61 93 - 0 + 49 (0) 69 - 75 61 93 - 60

Corporate banking Pieter Ruhaak Roland GerbigJutta Nikolic

Treasury Andreas Glaser Stephen Billing

Corporate sales Sascha Massoth Andreas DömelDietmar Kordel

`/�� Michael BrandThorsten DillFrank KiesewetterMichael LichiusNorbert Loeken

Syndicated loans Pieter Ruhaak

Real estate Jürgen Mertens Elke HöffkenBernd HütterMartin Michel

Real estate/valuation Petra Dietrich

Institutional funds business/asset management www.kbcfonds.de

Nunzia Thiriot Andrew HinrichsenJörg Mayr

Hamburg Ferdinandstrasse 12 Telephone20095 Hamburg Fax

+ 49 (0) 40 - 30 20 02 - 01 + 49 (0) 40 - 30 20 02 - 30

Corporate banking Marko Richling Bernd HintzeSven HoffmannDaniel Hülsemann

Hanover Podbielskistrasse 166b Telephone30177 Hanover Fax

+ 49 (0) 5 11 - 655 05 - 100 + 49 (0) 5 11 - 655 05 - 130

Corporate banking Marko Richling Jochen Bieder

Munich Kanalstrasse 17 Telephone80538 Munich Fax

+ 49 (0) 89 - 242 09 78 - 0 + 49 (0) 89 - 242 09 78 - 5

Corporate banking Dominique Bastian Claudia Müller

Real estate Klaus Fischer

Stuttgart Epplestrasse 23 Telephone70597 Stuttgart Fax

+ 49 (0) 7 11 - 63 37 04 - 0 + 49 (0) 7 11 - 63 37 04 - 20

Corporate banking Pieter Ruhaak Freiherr Rudolf von PodewilsMatthias Rother


Special functions

Honorary consul Kingdom of Belgium in state of BremenAxel BartschConsulateWachtstrasse 16 Telephone28195 Bremen FaxGermany

+ 49 (0) 4 21 - 36 84 - 330+ 49 (0) 4 21 - 36 84 - 482

Legal notice

Responsible for the contents KBC Bank Deutschland AG Jochen Bethge TelephoneJennifer Lutz Telephone

+ 49 (0) 4 21 - 36 84 - 412+ 49 (0) 4 21 - 36 84 - 327

Concept/design/typesetting ;��)`��>�� Scheessel

Printing Meiners Druck OHG Bremen

Picture credits

Titel page: Harald Bolten 9735996 fotolia.com, Michael Kügler 6895333 fotolia.com, apachelance 9873768 fotolia.com, Michael Kügler 10763639 fotolia.com, O, M, 1546409 fotolia.com, saschi79 8501076 fotolia.com, page 1: Frank Thomas Koch, Pressefotograf, Frankfurt, page 2 to 3: kuegi ��*��+�5� ��<�7��]��~��+��/�6��7��:��/6�7+��***��+�5� ��*��$*��+�5� ��/� ��6-ge 25712180 fotolia.com, Harald Bolten 9735996 fotolia.com, thorabeti 24588475 fotolia.com, Edith Ochs 3199790 fotolia.com, Edith Koelzer 31952796 fotolia.com, page 12 to 13: Jan Kranendonk 4227798 fotolia.com, Felix Horstmann 4227798 fotolia.com, pseudonym_cp 117888 fo-tolia.com, page 20 to 21: guentermanaus 3061363 fotolia.com, guentermanaus 3192967 fotolia.com, O, M, 1546409 fotolia.com, page 44 to 49: philipus 1863382 fotolia.com, Brian Eberle 6757475 fotolia.com, MAST 25486981 fotolia.com, Petrus Bodenstaff 16887314 fotolia.com, Michael Kügler 10763639 fotolia.com, fotobeam 9873768 fotolia.com, mirubi 5294985 fotolia.com, KorayErsin 14778576 fotolia.com, OutdoorPhoto 25827234 fotolia.com, stockWERK 7545116 fotolia.com, Oliver Klimek 933126 fotolia.com, page 60 to 61: Scirocco340 25142761 fotolia.com, dbvirago 1224067 fotolia.com, S,Külcü 23838663 fotolia.com, Jens Hilberger 23821579 fotolia.com, sashpictures 8501076 fotolia.com, Unless otherwise indicated: Achim Gedrat KBC Bank Deutschland AG.



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